Not-for-profits need to steal a march in the boardroom battle

An increasingly squeezed financial climate means not-for-profit organisations need to be smarter about who they recruit to board and senior management roles. Liza Ramrayka hears how to target the top talent

The importance of improving diversity on charity boards was discussed at a recent seminar. Photograph: Anna Gordon/guardian.co.uk

As the UK's not-for-profit (NFP) sector continues to feel the squeeze of public sector funding cuts and competition for donations, it is increasingly important for organisations to recruit and retain the best people at board and senior management level to help them to address their current and future needs.

In recent years, a variety of challenges and opportunities have been thrown at the NFP sector, from public service delivery to mergers and the need to diversify income. But attracting and keeping talented trustees, non-executive directors (Neds) and senior managers is a constant test. Some organisations need to tap into different skills and experience to create the right mix of talent to oversee new areas of work. Others may need to attract representatives from stakeholder groups, such as beneficiaries or local government.

Board diversity remains a particular challenge. Charity Commission research shows that only 0.5% of charity trustees are 18-24 years old, despite this age group making up 12% of the UK population. The average age of a charity trustee is 57 and nearly half of all trustees are over 60. Just less than a third (31%) of charity board positions are held by women, but fewer than 20 chairs of the top 100 charities are women.

Winning the battle for board and senior management talent was the theme of a recent seminar organised by NFP Interchange, a forum for not-for-profit Neds convened by Grant Thornton in partnership with the Guardian. The event brought together not-for-profit Neds and specialists from across the voluntary, housing and higher education sectors.

The seminar was chaired by Carol Rudge, global head of Grant Thornton's not-for-profit team, and opened with presentations on current recruitment and retention challenges, and ideas for attracting top talent.

Being clear about whom you want to recruit and why was a recurring theme of the seminar. Panellist Baroness Barbara Young, chief executive of Diabetes UK, posed the question: "Are you looking for challenge or for support?", adding that NFPs need to demonstrate "a real honesty" about their board's existing skills and abilities – and what might be needed in future to tackle challenges such as change in the NHS.

Board audit

Panellist Philip Nelson, executive search consultant at NFP recruitment consultancy Prospectus, agreed. "You have to have a really strong vision and picture of what your existing talent looks like, and look at new and previously untapped stakeholders," he told delegates. Nelson said a board audit can help an organisation pinpoint its strengths and weaknesses.

It is vital for the NFP sector to emphasise its attributes if it is to attract top talent, delegates heard. Nelson echoed Baroness Young in stressing the need for organisations to sell the "employer brand" and to demonstrate that their charity is a good place to work and that it continues to deliver high-quality work. Sitting on a charity board is "a good way of expanding your horizons", he said, but the right candidates might not necessarily be attracted because of a lack of knowledge about what exactly trusteeship involves. It is also important to have an appreciation of the "nuances" in recruitment practice when recruiting for a chair, trustee or senior manager. Chair Carol Rudge pointed out that having quotas was not a solution.

Panellist Cary Cooper, distinguished professor of organisational psychology and health at Lancaster University Management School, wondered why the sector was not tapping into potential talent at an earlier stage. "I don't see the NFP sector at [graduate] recruitment fairs. It is a great opportunity to go after really good undergraduate management students who want to do meaningful jobs. It's too late to start at senior management level."

Getting the board composition right is another challenge, panellists agreed. Baroness Young said recruiting "luminaries" who are crowd pullers is all very well, but they "probably won't roll up their sleeves" and help the board with its work.

Sacha Romanovitch, responsible for people and culture on Grant Thornton's national leadership board, suggested that organisations should, through their recruitment, create an agile board environment that is attractive and enables people to make their best contribution. Combine this with people who have a passion for the vision of the organisation that comes from their heart and you set yourself up to have a really high-performing senior team.

Delegate Enid Rowlands, chair of Victim Support, said that service delivery was moving charities into "new territory" which had a big impact on who they have on their boards. "Charities are in competition for service delivery contracts. You have to look at who you need who you don't currently have."

Richard Barber, a trustee at HFT, reminded delegates that more should be done to attract young people to boards: "Young trustees find it difficult to step up to the plate, but employees see it as a benefit."

Baroness Young told delegates that her charity, Diabetes UK, had set up a young leaders group to target younger voices. The network of ambassadors aged 16–30, who have diabetes, meet in person, and via email and social media during the year to clarify gaps in services and suggest ideas.

But some delegates were concerned that diversity on the board should be more than a token gesture. Carl Allen, a trustee at the National Black Workers Group said many black people on boards were "over achievers" and some may not share the same perspectives as other black people. All board members need to "think" diversity.

Supporting board members and senior managers to reach their potential is a key challenge for the sector, delegates heard. Panellist Bjorn Howard, group chief executive of housing group Aster, believes organisations don't spend enough time thinking about the "emotional intelligence" of board members: "One of our biggest governance challenges is to nurture the needs of different parts of the group. If people can't work cohesively and constructively, they might have the best CVs in the world, but it isn't going to work."

Prof Cooper said organisations need to assess whether board members are providing the required "added value" and look at whether the nature of the role has changed. Nelson highlighted the need for organisations to conduct board appraisals. He agreed that retaining talent helps to attract talent, but added that it was important to "refresh" the organisation: "Loss of talent can be reinvigorating… it should be seen as a positive step."

So how can organisations hold on to talented individuals once they've snared them? For Cooper, retention relies on having a career-development strategy and effective succession planning so people feel they have a future with the organisation. More effort should be spent on team building, he suggested: "We don't spend enough time creating an organisation in which people want to stay." Making sure board members really understand what their charity does – that they talk to people "on the shop floor" – and are acclimatised to their role are also vital actions.

For Nelson, retention comes down to having "a compelling narrative" where people know how they fit into the team and why they are important. "Most [job] candidates come to me because they feel they are not making a significant contribution to the charity they are working for," he said.

Cooper said the NFP sector was well placed to attract people who are looking for positions that support wellbeing, flexible working and autonomy. But Baroness Young warned against losing the "human contact" provided by office life.

Romanovitch told delegates that a "paradigm shift" around working practices could lead to organisations attracting different types of talent: "Organisations that look at things differently will steal a march in the talent battle." Tony Crook, chair of Shelter, and on the board of other not for profits, said that some of these boards were using meetings via telecon to deal with fiduciary and routine matters, enabling the board to focus on strategic matters when they met around the table.

Discussions also touched on recruiting the chair and how to avoid having the same one in place for too long. Alice Maynard, chair of Scope, told delegates about her involvement in a new association that offers peer support and information to charity chairs. Panellist Nelson suggested charities put into place an appointments committee that can help to identify new talent and enable a "smooth transition" when roles do arise.

Summing up, David Mills, editor of the Guardian's voluntary sector network, reminded delegates that the NFP sector was facing "tough times" and that organisations were in control of recruiting the senior talent needed to see them through. For Howard, getting the senior talent right is critical: "We, as a sector, are not very good at sacking people. But if we expect the organisation to be high-performing, the board needs to be high-performing."

On the panel

Carol Rudge (chair), partner and head of not for profit group, Grant Thornton

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